Published: Tue, October 02, 2018
Business | By Eloise Houston

Trump set to sell new Mexico-Canada trade agreement

Trump set to sell new Mexico-Canada trade agreement

When a reporter suggested he seemed confident of approval after his announcement, he said he was "not at all confident" - but not because of the deal's merits or defects.

"The factories were leaving, the jobs were leaving, people were being fired", Trump said about NAFTA at a Rose Garden press conference Monday.

The midnight Sunday deal between US and Canadian negotiators was a decisive victory for President Trump's unconventional approach to trade. "So fair trade is always better than using one commodity to make an agreement happen".

Meredith Crowley, worldwide trade economist at the University of Cambridge, said the agreement on dairy appeared be a "cosmetic concession", suggesting Canada had done well out of the pact.

Most critical of the deal was the dairy industry, which railed against expanded US access to the domestic dairy market and the elimination of competitive dairy classes.

"We know that they are of grave interest to both countries", he said.

Prime Minister Justin Trudeau said the new agreement protects Canada's supply management systems.

Canada had resisted American moves to remove the provision, keen to be able to challenge U.S. trade penalties. "There are a lot of things unresolved", she said.

The most significant achievement by Canadian negotiators is their success in preserving Chapter 19 from the original NAFTA. Canada's participation in a modernized NAFTA is crucial for the growth and prosperity of our city and our state.

After 20 months in the White House, the president has upended relations with countries that account for roughly two-thirds of the $3.9 trillion in goods that the USA buys and sells globally.

Trump spoke after it emerged that Canada and Mexico had agreed to a pact the administration has dubbed the "United States Mexico Canada Agreement", or USMCA.

NAFTA has always been a lightning rod for criticism among labor unions and manufacturing workers since it was being negotiated in the early 1990s during President George H.W. Bush's administration and later implemented by President Bill Clinton.

"It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the US and will bring all three Great Nations closer together in competition with the rest of the world", Trump said.

The U.S. -Mexico-Canada Agreement, or USMCA, also prohibits its members from seeking to boost their economic competitiveness by devaluing their currencies, something Trump has accused China of doing in the past. The new deal will see two remain basically unchanged, but renamed, according to senior White House officials. It is also important that the agreement not hinder energy integration across North America, which has brought the continent closer to real energy security than ever in the past 50 years. He'll be replaced by President-elect Andres Manuel Lopez Obrador, who tapped Ebrard to be his foreign relations secretary. However, he also said that "finishing this process of renegotiation provides certainty for financial markets, investment and job creation in our country".

In all, Trump said, the pact covers $1.2 trillion in trade. A senior White House official told reporters today that the Trump administration would love to have a trade deal with India, but it is too early to talk about it yet. They suspected Canada, which had said it wasn't bound by US deadlines, was delaying the talks until after provincial elections Monday in Quebec, where support for Canadian dairy tariffs runs high. He's a professional, I'm a professional. Canada and Mexico rank first and second among export markets for US companies.

The breakthrough over the weekend could strengthen Mr. Trump's hand by aligning the U.S., Mexico and Canada as three-way trade partners, with China on the outside looking in.

The deal lowers the risk of higher import tariffs on Mexican and Canadian goods arriving in the U.S., seen as a threat from the Trump White House used to secure trade concessions.

Dias said he is not thrilled by what Canada conceded in the dairy sector, but he believes there will be a solution out of discussions between the government and the dairy lobby. That started a 90-day clock that would let Pena Nieto sign the new pact before he leaves office December 1.

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